Loan terms aimed at reducing lay-offs

HOLDING ON CLA Minister Jennifer Wang said that a plan on the provision of insurance subsidies to companies that promise not to lay off its workers was still being discussed

By Shih Hsiu-chuan and Shelley Huang / STAFF REPORTERS

The government yesterday proposed preferential loan terms to enterprises that promise not to lay off employees during the global downturn.

“We hope the measures will encourage more businesses to make a ‘no lay-off’ pledge,” Executive Yuan Spokesman Su Jun-pin (蘇俊賓) told reporters late last night following a four-hour meeting convened by Vice Premier Paul Chiu (邱正雄).

A business that promises to sack less than 1 percent of its employees during this year will be given a “caring enterprise (愛心企業)” certificate which will enable it to take advantage of the loan scheme.

LOAN-TO-VALUE RATIO

Certified small and medium size businesses can take out loans from a total of NT$300 billion (US$9 billion) available with a lower preferential interest rate and enjoy a higher loan-to-value ratio than businesses without a certificate, Su said.

Certified large businesses will be exempt from restrictions that forbid businesses from taking out new loans from the NT$600 billion project to repay their old debts, Su said.

Su said that the measures were in line with the “three back-ups policy” — to back up banks, the banks back up enterprises and the enterprises back up workers — that Premier Liu Chao-shiuan (劉兆玄) said had guided his Cabinet’s response to the challenges thrown up by the global economic situation.

DECISION

Meanwhile, Council of Labor Affairs (CLA) Minister Jennifer Wang (王如玄) said yesterday that the plan on whether to provide labor and health insurance subsidies to companies that promise not to lay off its workers was still “under discussion.”

Wang made the comments at the legislature’s Health, Environment and Labor Committee session yesterday after legislators quizzed her on the CLA’s plans to subsidize “caring enterprises” (愛心企業), or companies that promise not to lay off workers this year.

According to Taiwan’s current labor insurance system, the employer is responsible for 70 percent of the employee’s labor insurance fees, while the employee pays 20 percent and the government pays 10 percent. Legislators urged Wang to “fight for workers’ interests” and provide subsidies not only to companies, but to workers as well.

In response, Wang said the plan was still “under discussion” and declined to comment further.

Wang said the council had a range of measures with which to lower the unemployment rate in the event numbers rise to a certain level. When asked by legislators what “big plans” the council had in mind, Wang said the council had completed a draft proposal to increase job openings in the public sector and industries such as environment-related industries and caregiving.

APPROVAL PERIOD

The council is also mulling extending the approval period for foreign labor, so that companies may get more time between the day they receive approval to hire foreign labor and the actual employment start date. The council is mulling extending the period from six months to one year.

In related news, the committee passed a draft amendment yesterday which would allow workers who reach the age of 60 and have worked for at least 10 years to apply for retirement and collect a pension.

As the law stands, workers must fulfill one of two conditions to be able to retire — the first, be at least 55 years of age and have worked for at least 15 years, or have worked for at least 25 years.

The council estimates that about 90,000 people would be able to benefit from this amendment if it becomes effective after passing a general vote in the legislature.